The old-fashioned values of patience and resilience have their place but, as is often the case, it’s maverick flair that grabs the attention. So it was witnessed recently at the Wankhede stadium where the visiting English cricket team’s skipper Alistair Cook’s dogged effort was overshadowed by Kevin Pietersen’s flamboyance. Off the field though, another English visitor in town has come to typify this adage. Boris Johnson, the mercurial mayor of London, is no stranger to the limelight. The mayor’s trip to India this week with a delegation of business leaders is intended to promote the attractiveness of Britain as a destination for Indian investment and talent. A high-profile emissary is surely welcome. But mere rhetoric will fail to persuade if not followed through with concrete policies. The plain truth is that nostalgia alone cannot suffice as a basis for an enduring business partnership.
In terms of contemporary history, even a quarter century ago, the spectacle of a leading British politician visiting India to directly pitch for investment would have been dismissed as fantasy in most quarters. Back in the days of the infamous licence permit raj that enfeebled the Indian economy, Western politicians were more inclined to hector their Indian politicians with patronizing missives. A relationship that was skewed towards aid and not trade made for an unequal bargain. Liberalization has provided a transformative gloss to that relationship in fairly dramatic terms. A public policy insularity that openly derided choice and competition has been cast aside in favour of a more confident outlook that is receptive to incremental reform. It has changed how outsiders perceive India, but more fundamentally, it has changed how Indians perceive themselves.
Nevertheless, for all the seismic change that has—and continues—to take place in India, the establishment in Britain has traditionally not been able to fully appreciate the scale of the evolution and the opportunities that this may present for mutual business development. In this neglect, both Labour and Conservatives have been equally to blame. For instance, in the New Labour years, Gordon Brown only came to India after a decade of being chancellor. In that period, Britain dropped from India’s fourth largest trading partner to almost number 20—nearly exchanging roles with Germany. By 2010, Britain was doing more business with Sweden than India. In this period, the Tory party was unable to demonstrate a firm grip on the issues either or come up with an approach tailored to India’s altered circumstances. Ultimately, until very recently, it seemed that Britain’s approach to deepening economic cooperation with India revolved on speaking to a complacent sense of shared history and culture. Unfortunately, sentimentality alone cannot act as an adhesive for gluing a modern bilateral relationship. As Johnson has shrewdly noted, it is an attitude that does not “cut the mustard” in a post-colonial epoch.
The blunt reality is that Britain badly needs to reconfigure its external relationships to suit a multi-polar era. With the downturn still hitting the British high street, the straitened economic circumstances at home and the parlous state of the UK’s fiscal deficit means that Britain requires external investment not so much to merely affirm its commitment to free trade, but out of sheer necessity. The economic uncertainty in the euro zone also underscores the need to deepen trading relationships with partners elsewhere. Amid this backdrop, it comes as no surprise that Britain seeks to aggressively woo Indian investments.
That said, Britain does retain a considerable degree of attraction as an investment destination. Its blend of cultural and commercial zest has an intrinsic appeal for Indian investors. Despite the economic crisis, London remains a premier global financial centre and a hub for businesses, innovation and creativity. It is a global city where outsiders continue to thrive. From an Indian perspective, there is mutual benefit in leveraging British knowhow and technical expertise across a range of domestic sectors in India, whether it be infrastructural development, heath care or urban planning.
Despite all those manifest positives though, for a historic Indo-British commercial partnership to endure and flourish, a great deal more needs to be done. Back in Britain, an extraordinarily uncompetitive taxation structure—bordering on the punitive—needs to be reformed to encourage and reward wealth creation. The populist stringency of the UK visa regime, which makes it difficult for business to hire overseas talent and perversely discourages high-spending tourists and students, runs counter to Britain’s long-term interests. It needs re-hauling in short order. That said, even if somewhat belatedly there is a recognition in Britain that it needs to be more sensitive to India’s growing potential and concerns, then that is welcome. But in order to convince Indians that Britain is truly “open for business”, the soothing rhetoric needs to be matched by concrete policies.
Rishabh Bhandari is a lawyer-based in London. He writes on subjects that include British and Indian social, political and economic affairs.